War's certainty: a big price tag

In 1966, the Pentagon offered an estimate of what the Vietnam War would cost. When America pulled its troops out in 1973, the tab was 90 percent higher - $111 billion.

The Civil War, similarly, cost the North 13 times the original estimate of President Lincoln's Treasury secretary.

As the United States launches its first major war effort of the 21st century, history suggests one financial fact to bank on: The cost will be higher than forecast.

Of course, this conflict, in which the world's most sophisticated weapons are aimed at the leader of a nation with vastly inferior military capabilities - is not your typical war. Uncertainties, ranging from a quick toppling of the regime to an expensive peacekeeping aftermath - could push the tab higher or lower than even the most careful estimate.

So far, the Bush administration itself has not provided an official estimate. The White House may fear a public forecast will create a negative climate of opinion toward the war. Already, the war is seriously jeopardizing the chances of President Bush's proposed $726 billion tax cut passing. Even some Republicans in the Senate are talking about cutting that amount in half.

Nonetheless, the Defense Department and White House budget officials have been preparing a supplemental spending request. Early reports suggested it could be in the $60 billion to $95 billion range for one year, to be submitted to Congress once war starts. It would cover the war, some aftermath costs, and extra terror-war expenses.

The total tab is made up of items small and big, multiplied many times:

• About $10,000 to 15,000 per hour for a bomber run, depending the plane.

• $6.77 for each "meal ready to eat" for soldiers in the field

• $21,000 or so to convert a gravity bomb into a satellite-guided JDAM bomb.

• About $1 million for each Tomahawk cruise missile.

• $3 million a day to deploy an aircraft carrier battle group (the number deployed has gone up because of the war).

Some 80 percent of the costs of combat derive from salaries, transportation and other logistics, food, and the like, says Gordon Adams, a war expert at George Washington University in Washington. The other 20 percent is for ammunition, missiles, other weapons-related costs.

The Congressional Budget Office (CBO) took a stab at reckoning some war costs last September. The cost of deploying troops is some $14 billion. Add just over $10 billion for the first month of combat. If the war lasts longer, include an extra $8 billion for each month. After hostilities end, the cost to get the forces and their equipment home again could be $9 billion.

Not counted by the CBO are occupation costs, perhaps $1 billion to $4 billion a month, and reconstruction costs and foreign aid costs. The nonpartisan agency says it has no way to estimate such costs.

Mr. Adams describes this as a "low-end estimate."

"The historical record is littered with failed forecasts about the economic, political, and military outcomes of wars," writes William Nordhaus, an economist at Yale University in New Haven, Conn.

Factoring broader economic impacts into his estimates of the costs of an Iraqi war, Mr. Nordhaus figures the tab could range from $99 billion in the 2003-2012 period if the military and nation-building campaigns are quick and successful to $1.9 trillion if it goes badly. That big sum involves $778 billion in higher oil costs if the war destroys a large part of Iraq's oil infrastructure and $391 billion because this pushes the US economy into a slump.

In the first Gulf War, to kick Iraqi forces out of Kuwait, American allies, primarily Germany, Japan, Saudi Arabia, and Kuwait itself, covered more than 80 percent of the costs of that war. This time, the US is having difficulty rounding up supporters for its present move against Iraq.

Experts suspect European nations and Japan may be somewhat more willing to contribute to postwar humanitarian and rehabilitation costs in Iraq. Iraq's own oil revenues might eventually cover some of those costs as well.

Unofficially other numbers play into the cost: aid promised to nations that may help with the war effort, such as Turkey.

Christopher Hellman, an analyst at the Center for Defense Information in Washington, calls the talk of a $60 billion to $95 billion supplemental appropriation as just a "down payment" on the eventual costs of a war. "It is to get people to start thinking about large numbers."

Mr. Hellman figures the US will be stuck occupying Iraq "for an awful lot of years."

The Bush administration hopes the stay will not be so extended.

The cost of a war has become increasingly a political issue in Washington. Sen. Ernest Hollings (D) of South Carolina sent a letter to the Senate Finance Committee recently requesting a hearing on methods to pay for impending military action.

Moreover, he introduced a "War Financing Act of 2003" to impose a 1 percent value-added tax designed to pay for the war. Chances of passage are slim. But Mr. Hollings, a hawk on budget deficits, hopes to make a point that the war could expand the federal deficit from $300 billion-plus this year to $400 billion or more.

"We have paid for every other war in our nation's history," Mr. Hollings stated. Without paying for the war now, those members of the armed forces returning to the US will be handed "the bill."

Conflict/ Cost (billions)/ Per capita cost

Revolutionary War (1775-1783) $2.2/ $447

War of 1812 (1812-1815) 1.1/ 120

Mexican War (1846-1848) 1.6/ 68

Civil War (1861-1865) 62.0/ 1,686

Spanish-American War (1898) 9.6/ 110

World War I (1917-1918) 190.6/ 2,489

World War II (1941-1945) 2,896.3/ 20,388

Korea (1950-1953) 335.9/ 2,266

Vietnam (1964-1972) 494.3/ 2,204

First Gulf War (1990-1991) 76.1/ 306

Source: William Nordhaus, Yale University. Cost in 2002 dollars.